Complete guide to Brexit process
1/19/2017
Current state of affairs
GBP/USD spearheaded on Tuesday after Theresa May painted a rather rosy future for the UK outside the EU. Ms. May’s aims in the forthcoming Brexit negotiations have finally been set out. The UK prime minister emphasized that she wants a clean separation from the EU on the friendliest terms possible – meaning close trade cooperation, smooth and orderly transitional arrangements, and a vast, but not total exemption of the UK from the budget contributions to the EU. In addition, she assured the public that Parliament would get a vote on the eventual deal.
The reaction of the FX market participants was favorable, the pound got a significant boost.
Clarification on May’s plans
Keep businesses, public sector and everybody informed on the Brexit process.
Ms. May in her speech eliminates uncertainty – “I can confirm today that the Government will put the final deal that is agreed between the U.K. and the E.U. to a vote in both Houses of Parliament before it comes into force.” So, through this announcement Ms. May excludes the potential legal challenges and shows that the Brexit will occur anyways.
The UK Government doesn’t seek membership in the Single Market because it would preserve the freedom of movement of people and contradict the UK’s desire to stem immigration flows from the EU. Instead, the UK seeks the greatest possible access to Single Market through a very ambitious Free Trade Agreement. So, if May manages to strike this deal, the UK will reap numerous benefits: it will preserve trade relationships with its EU partners and the UK won’t need to contribute huge sums to the EU budget.
One of the main imperative of Ms. May’s speech: Britain will search for new trading partners from outside the EU willing to rediscover its role as a great, global, trading nation.
Ms. May promised to renegotiate the EU Customs Union. If she succeeds in doing so, then the UK will obtain access to the EU Single Market and will be free to trade with the rest of the world on its own terms.
The UK will seek continuation of the UK collaboration with its European partners on major science, research and technology initiatives.
To achieve the smoothest and the most orderly transitional arrangements possible that would suit the UK and the EU.
Remaining legal hurdles
Theresa May’s right to trigger Article 50 is legally challenged. The question is still open whether Government needs to consult Parliament before invoking the aforementioned article or not. The High Court ruled that May didn’t possess a unilateral right to start up a continuous process of the EU-UK negotiations. Now, it is the Supreme Court’s to decide whether the UK’s Government can legally begin the Brexit process without parliamentary approval or not. The judges are to release their final decision on January 24 at 11:30 (MT time).
A ruling forcing Ms. May to consult Parliament before triggering Article 50, could give her political counterparts last chance to reject the prime-minister’s plan to leave the single market.
After “Brexit”: transitory process in details
Once Article 50 is triggered, the UK will be given 2 years to negotiate its withdrawal from the EU. The terms of the UK’s exit will have to be discussed in the European Council comprised of 27 leaders. To come into force the draft leading to the UK separation with the EU should get an approval from at least 20 countries with 65% of the population. Then it should be ratified by the European Parliament. At the end of 2 years, negotiations can be extended further. If there is no agreement on the extension of the negotiation, the UK will no longer comply with the EU treaties
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